Lucara Diamond Posts Strong Q1 Operations & Revenue

Mining and Exploration
10/05/2019 13:43

Canadian miner Lucara Diamond has reported the best quarter in the history the Karowe mine in Botswana in terms of ore processing performance, lowering the cost of its operations and achieving the best results from its regular diamond sales in over a year. This was before the April recovery of the largest diamond to be mined at Karowe to date, an unbroken 1,758 carat near-gem-quality stone, which became the largest diamond recovered in Botswana and one of the largest diamonds in recorded history, superseding the spot held by the 1,109 carat Lesedi La Rona recovered from Karowe in 2015. Lucara also today declared the second quarterly dividend of 2019 of CDN 2.5 cents per share to be payable Thursday, June 20, 2019 to the shareholders of record at the close of business on Friday, June 7, 2019.

The miner achieved revenue of $48.7 million in Q1 2019, a 92% increase over Q1 2018 ($25.4m) and a 20% rise over Q4 2018 ($40.6m). Lucapa sold 95,057 carats during the first quarter at $512 per carat yielding an operating margin of $343 per carat. So, while they sold fewer carats than last quarter (110,553), the average price earned per carat ($512) represented a 40% increase over the $367 per carat earned in Q4 2018. Lucara has also changed the way they are organizing their sales: Historically, Lucara has sold diamonds through both regular stone tenders (RSTs) and exceptional stone tenders (ESTs). In September 2018, the company modified its tender sales to a blended tender process, combining the sale of exceptional stones with the balance of run of mine production into one sale. This change was made to decrease the inventory time for large, high value diamonds and to generate a smoother revenue profile that better supports price guidance on a per sale basis.

Lucara said in a statement that Q1 2019 was "characterized by a continuation of the strong operating performance observed during the latter half of 2018, having met or exceeded guidance with respect to all mining and processing activities." Lucara set a company record of 0.76 million tonnes of ore processed, "the best quarter in Karowe's history", and recovered 132,336 carats (including 10,899 carats recovered from re-processing historic recovery tailings from previous milling), achieving a recovered grade of 15.9 carats per hundred tonnes processed. Recoveries during the quarter included a 240 carat top white gem and a 223 carat high white gem, as well as 170 'specials' (+10.8 carats), representing 4.1% weight percentage of total recovered carats, in line with mine plan expectations. They also recovered 7 diamonds greater than 100 carats in weight. 

"Lucara's focus on operational excellence has delivered another strong quarter," said Eira Thomas, President & CEO. "Costs were significantly down quarter over quarter and the first sale of the year delivered revenues in excess of US$ 47 million, in line with expectations.In April, Lucara's technologically advanced, XRT diamond recovery circuit delivered one of the largest diamonds in recorded history, the largest diamond recovered in Botswana, and the largest diamond to be mined at Karowe to date.  The unbroken 1,758 carat diamond is a testament to the remarkable nature of the Karowe resource and the strong operating environment prevailing at the mine."